Unable to uncheck encrypt local backup from iTunes Summary screen

I just setup my new iPhone 14 Pro with my Macbook and it immediately requested I provide a password for the encrypted backup. I obliged. Now I cant turn it off. I had an issue a year ago where this happened with my previous iPhone. If you delete the backup, it still won't reset. When you enter the password it sends a prompt to the iPhone to approve and when you do the message below is displayed.

I've tried it 10x and cant figure it out. I want to be able to keep an unencrypted copy locally on my machine. I've tried disconnecting and reconnecting, but there's no other info on the internet relating to the issue. Please help! Thanks in advance

The password you entered to protect your iPhone backup could not be set because backup has been disabled for this iPhone by an administrator.